FTC Proposes Ban On Noncompetes

Starting 2023 off with a bang, the Federal Trade Commission (FTC) proposed a new rule that would ban employers from the use of noncompete agreements.

"The freedom to change jobs is core to economic liberty and to a competitive, thriving economy," FTC Chair Lina M. Khan said in a statement. "Noncompetes block workers from freely switching jobs, depriving them of higher wages and better working conditions, and depriving businesses of a talent pool that they would need to build and expand."

Pursuant to the proposed rule—which the agency based on a preliminary finding that noncompetes constitute an unfair method of competition in violation of Section 5 of the FTC Act—it would be illegal for an employer to enter into or attempt to enter into a noncompete with a worker; maintain a noncompete with a worker; or represent to a worker, under certain circumstances, that the worker is subject to a noncompete.